WASHINGTON/LONDON (Reuters) - U.S. President Donald Trump on
Wednesday imposed new sanctions on Iran, targeting revenue from
its exports of industrial metals, the latest salvo in tensions
between Washington and Tehran over a 2015 international accord
curbing the Islamic Republic's nuclear program.

Iran had announced hours earlier that it was relaxing some
restrictions on its nuclear program, steps that stopped short
of violating the deal with world powers for now, but
threatening more action if countries do not shield it from U.S.
sanctions.

An executive order issued by Trump covers Iran's iron, steel,
aluminum, and copper sectors, the government's largest
non-petroleum-related sources of export revenue and 10 percent
of its export economy, a White House statement said.

"Tehran can expect further actions unless it fundamentally
alters its conduct," Trump said.

The administration says the nuclear deal, negotiated by Trump's
predecessor Barack Obama, was flawed as it is not permanent,
does not address Iran's ballistic missile program and does not
punish it for waging proxy wars in the Middle East.

Tensions between the two countries were already high when the
Trump administration said last weekend that it was deploying a
carrier strike group and bombers to the Middle East in response
to what it said were "troubling indications and warnings" from
Iran.

On Wednesday, a senior administration official said the United
States was "not escalating militarily against Iran" and accused
Iran of being "provocative." It was in Iran's best interests to
continue complying with the pact, the official said.

The executive order effectively bans entities from the
purchase, acquisition, sale, transport, or marketing of those
minerals and their products from Iran or face sanctions.

It also says any individuals and entities would be subject to
U.S. sanctions if they knowingly engaged in a significant
transaction for the sale, supply, or transfer to Iran of
significant goods or services used in connection with those
industrial metal sectors.

The U.S. Treasury said it was allowing a 90-day winding down
period for transactions related to Iran's metals sectors and
warned against entering into any new business after May 8,
saying that would not be considered a wind-down activity.

A year ago, Trump unilaterally withdrew the United States from
the nuclear deal signed by Iran, Russia, China, Britain,
France, Germany and the United States. The accord relaxed
international sanctions on Iran in return for Tehran accepting
curbs on its nuclear program that were designed to prevent it
from developing nuclear weapons. Tehran has said it pursued a
peaceful nuclear program only.

Iran's nuclear programme - https://tmsnrt.rs/2WqRqfI

ENRICHED URANIUM SALES

Iranian President Hassan Rouhani announced changes on Wednesday
that experts said seemed tailored to ensure Tehran avoids
triggering the deal's mechanism to punish it for violations, at
least for now. The main new measure that takes effect now would
have limited practical impact: a halt to Iran's sales of
enriched uranium and heavy water to other countries.

The deal allows such sales so Iran can keep reducing its
stockpiles below maximum thresholds, but Washington already
effectively barred the sales with a sanctions move last week.
For now, Iran's stockpile of enriched uranium is still well
below the deal's cap and heavy water is less sensitive.

"The Iranian people and the world should know that today is not
the end of the JCPOA," Rouhani said in a televised address,
using the acronym for the nuclear deal. "These are actions in
line with the JCPOA."

Rouhani also threatened that in 60 days Iran would resume
enrichment of uranium beyond the low fissile purity - suitable
for civilian nuclear power generation - allowed under the deal,
unless the five other powers signed up to it found a way to
protect Iran's oil and banking industries from U.S. sanctions.

Tehran halting compliance with some elements of the nuclear
deal was "nothing less than nuclear blackmail of Europe," Tim
Morrison, special assistant to the U.S. president and senior
director for weapons of mass destruction, told a conference.

"Now is the time for the community of nations to strongly
condemn Iran’s nuclear misconduct and increase pressure on the
regime to comply with U.S. demands," Morrison said.

Morrison said the United States would move quickly against
any attempt by European countries to undermine Washington's
sanctions pressure on Iran. He advised them against using the
so-called Special Purpose Vehicle to facilitate non-dollar
trade to circumvent U.S. sanctions.

From this month, Washington has effectively ordered countries
worldwide to stop buying Iranian oil or face sanctions of
their own. The Trump administration has revoked waivers that
had allowed some countries to continue buying Iranian oil and
it aims to reduce Iranian crude exports to zero.

Washington has also blacklisted Iran's Revolutionary Guards
as a terrorist group. Iran responded with threats to close
the Gulf's Strait of Hormuz - the conduit for about a third
of the world's seaborne oil exports - if its ships were
blocked there.

"We have made our focus diplomatic isolation and economic
pressure and that policy is working," Brian Hook, Special
Envoy for Iran, said in a briefing. Hook said that more
nations now, compared with a year ago, were in agreement with
the United States on Iran.

Washington's European allies opposed Trump's decision to pull
out and have tried, so far in vain, to find ways to blunt the
economic impact of new U.S. sanctions, which include an
all-out effort to block Iran's oil exports to throttle its
economy.

KEEPING ACCORD ALIVE

France and Germany both said they wanted to keep the nuclear
deal alive, and warned Iran not to violate it.

"It is important to avoid any action that would impede the
implementation of their obligations by the parties now
engaged in the accord or that would fuel an escalation,"
deputy foreign ministry spokesman Olivier Gauvin said in a
statement.

Russia and Iran both blamed the United States for what they
portrayed as Tehran's forced decision to suspend some pledges
under the nuclear deal, while putting the onus on European
powers to guarantee sanctions relief for Iran.

China said the deal should continue to be implemented and
called on all sides to exercise restraint and pursue
dialogue.

The looming total ban on oil sales is likely to sharply
increase the economic hardship for Iran's 80 million people.
Finding a response is the biggest test yet for Rouhani, a
pragmatist who has faced strong opposition from hardliners.

(Reporting by Humeyra Pamuk and Jonathan Landay in WASHINGTON
and Bozorgmehr Sharafedin in LONDON; Additional reporting by
Steve Holland, Idrees Ali and Makini Brice in Washington, Ben
Blanchard in Beijing, Babak Dehghanpisheh in Geneva, Sophie
Louet in Paris, Francois Murphy in Vienna and Michelle Martin
in Berlin; Writing by Peter Graff and Grant McCool; Editing
by Mark Heinrich and James Dalgleish)

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